Kerry: Ukraine referendum 'contrived and bogus'

European Union High Representative Lady Catherine Ashton and US Secretary of State John Kerry answer reporters'' questions during a joint news conference.

US Secretary of State John Kerry rejected efforts by pro-Russian forces to hold a referendum in eastern Ukraine, but he suggested that fresh sanctions against Russia now could be counterproductive.

Kerry again cautioned Moscow that the US would impose more powerful sanctions designed to hurt Russia's economy if it disrupts Ukraine's presidential election set for May 25.

He suggested, however, that moving too soon on tougher sanctions could backfire.

"You have to ask yourself, if the price has been fully paid ahead of time, whether or not that invites something further that you don't want to have happen, so there is a delicate mix here," Kerry said in a joint news conference with EU foreign policy chief Catherine Ashton.

The United States and European Union have imposed limited sanctions on lists of individual Russians and small firms, but have held back from measures designed to target specific sectors of Russia's economy.

Most of the diplomacy has so far centered around the election date. State Department officials have said Washington and European partners are currently designing the next phase of sanctions against Moscow and could be triggered if Russian forces cross into Ukraine.

Kerry denounced efforts by separatists to hold a referendum on secession, similar to the one that preceded Russia's annexation of Crimea.

"We also are very concerned about efforts of pro-Russian separatists in Donetsk and Luhansk to organize, frankly, (a) contrived and bogus independence referendum on May 11," he said at the news conference.

"We flatly reject this illegal effort to further divide Ukraine," he added, saying he and his European counterparts would meet in Europe next week to discuss next steps.

Ukraine government forces have pressed on with an offensive in the east of the country, where separatist rebels have so far held firm at their main outpost in the town of Slaviansk and shot down three Ukrainian helicopters.

Moscow has tens of thousands of troops massed on Ukraine's eastern frontier. Western countries say Russian agents are directing the uprising and Moscow is stoking the violence with a campaign of propaganda, broadcast into Ukraine on Russian state channels, that depicts the government in Kiev as "fascists".